Pakistan ranks second in South Asia for 2023 interest payments: WB debt report
-
- Web Desk
- Today
ISLAMABAD: Pakistan’s external debt reached $130.847 billion by the end of 2023, up from $127.708 billion in 2022, according to the World Bank’s latest International Debt Report 2024.
This rise in debt comes amid increasing global interest payments, particularly within the South Asian region, where Pakistan ranks as a key contributor.
The report highlighted that South Asia saw steepest increase in interest payments on public and publicly guaranteed debt in 2023, surging by 62 per cent to $12.5 billion.
The biggest increases were observed in Bangladesh and India which saw their interest payments rise by more than 90 per cent. Pakistan recorded the second-highest payments in the region.
For countries eligible for International Development Association (IDA) assistance, interest payments have tripled since 2013, reaching an all-time high of $34.6 billion in 2023.
The ratio of interest payments to export earnings, a critical indicator of a country’s ability to repay debt, rose by 1.6 percentage points to 5.8 per cent in 2023 — a level last seen in 2005.
Pakistan was one of the countries with the highest ratios, with interest payments accounting for 13.6 per cent of export earnings, along with Mozambique (38.3 per cent), Senegal (25.9 per cent), Kenya (12.8 per cent), and Dominica (10.3 per cent). This increase has further stressed the fiscal positions of these nations.
According to Business Recorder, the report also noted that IMF repurchases by low- and middle-income countries, excluding Argentina, more than doubled in 2023, reaching $12.2 billion. Pakistan, along with Egypt and Ukraine, accounted for a significant portion of these repurchases.
This spike in repurchases outpaced new IMF lending, which saw a modest 12.9 per cent increase to $14.8 billion in 2023, following the stabilisation of lending after the massive support extended during the Covid-19 pandemic.
In terms of remittances, Pakistan remained one of the top recipients in 2023, receiving $26.6 billion. Other leading recipients included India, with $119.5 billion, followed by Mexico, the Philippines, and China.
Pakistan’s total external debt in 2023 includes $11.532 billion in IMF credit and Special Drawing Rights (SDR) allocations, a slight increase from $11.522 billion in 2022.
The country’s long-term external debt grew to $110.437 billion in 2023, up from $107.418 billion in the previous year. Public and publicly guaranteed debt accounted for the bulk of this, totalling $92.990 billion.
Breaking down the creditors, multilateral lenders held 46 per cent of Pakistan’s public and publicly guaranteed debt, with the World Bank and Asian Development Bank (ADB) being the largest contributors.
Bilateral creditors, mainly China and Saudi Arabia, accounted for 45 per cent, while private creditors, including bondholders and other lenders, held the remaining 9 per cent.
